Yeah essentially it’s just a set of agreements the US has with other nations, each of which is different. But basically your overseas income up to certain amounts will be tax exempt in the US. This is to account for the fact that you’re also paying overseas taxes and using overseas social services instead of US ones. You still have to file your overseas income, but you don’t end up paying any taxes on it, unless it crosses the threshold.
Check out the Foreign Earned Income Exclusion…
“Earned income” means W2 wages not capital gains or any of the other avenues rich people make their money.
Yeah essentially it’s just a set of agreements the US has with other nations, each of which is different. But basically your overseas income up to certain amounts will be tax exempt in the US. This is to account for the fact that you’re also paying overseas taxes and using overseas social services instead of US ones. You still have to file your overseas income, but you don’t end up paying any taxes on it, unless it crosses the threshold.
I don’t see how that would apply to someone not actually living outside the US as this sub-thread suggests.